Vistaprint 2010 Annual Report Download - page 33

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Form 10-K
We sell our products and services primarily through our websites. If we are unable to acquire
or maintain domain names for our websites, then we could lose customers, which would
substantially harm our business and results of operations.
We sell our products and services primarily through our websites. We currently own or control a
number of Internet domain names used in connection with our various websites, including
Vistaprint.com and similar names with alternate URL names, such as .net, .de and .co.uk. Domain
names are generally regulated by Internet regulatory bodies. If we are unable to use a domain name
in a particular country, then we would be forced to purchase the domain name from the entity that
owns or controls it, which we may not be able to do on commercially acceptable terms or at all; incur
significant additional expenses to market our products within that country, including the development
of a new brand and the creation of new promotional materials and packaging; or elect not to sell
products in that country. Any of these results could substantially harm our business and results of
operations. Furthermore, the relationship between regulations governing domain names and laws
protecting trademarks and similar proprietary rights is unclear and subject to change. We might not be
able to prevent third parties from acquiring domain names that infringe or otherwise decrease the
value of our trademarks and other proprietary rights. Regulatory bodies could establish additional top-
level domains, appoint additional domain name registrars or modify the requirements for holding
domain names. As a result, we may not be able to acquire or maintain the domain names that utilize
the name Vistaprint in all of the countries in which we currently or intend to conduct business.
Our revenues may be negatively affected if we are required to charge sales, value added or
other taxes on internet sales.
In many jurisdictions where we sell products and services, we do not collect or have imposed
upon us sales, value added or other consumption taxes, which we refer to as indirect taxes. The
application of indirect taxes to ecommerce businesses such as Vistaprint is a complex and evolving
issue. Many of the fundamental statutes and regulations that impose these taxes were established
before the growth of the Internet and ecommerce. In many cases, it is not clear how existing statutes
apply to the Internet or ecommerce. Bills have been introduced in the U.S. Congress that could affect
the ability of state governments to require out of state internet retailers to collect and remit sales taxes
on goods and certain services. The imposition by national, state or local governments, whether within
or outside the United States, of various taxes upon internet commerce could create administrative
burdens for us and could decrease our future revenue. Additionally, a successful assertion by one or
more governments in jurisdictions where we are not currently collecting sales or value added taxes
that we should be, or should have been, collecting indirect taxes on the sale of our products could
result in substantial tax liabilities for past sales, discourage customers from purchasing products from
us, decrease our ability to compete with traditional retailers or otherwise negatively impact our results
of operations.
Our business is dependent on the Internet, and unfavorable changes in government regulation
of the Internet, e-commerce and email marketing could substantially harm our business and
results of operations.
Due to our dependence on the Internet for our sales, regulations and laws specifically governing
the Internet, e-commerce and email marketing may have a greater impact on our operations than
other more traditional businesses. Existing and future laws and regulations may impede the growth of
e-commerce and our ability to compete with traditional graphic designers, printers and small business
marketing companies, as well as desktop printing products. These regulations and laws may cover
taxation (as discussed above), restrictions on imports and exports, customs, tariffs, user privacy, data
protection, commercial email, pricing, content, copyrights, distribution, electronic contracts and other
communications, consumer protection, the provision of online payment services, broadband residential
Internet access and the characteristics and quality of products and services. It is not clear how
existing laws governing many of these issues apply to the Internet and e-commerce, as the vast
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